Big Y employees check out customers Wednesday at the Northampton store. Big Y Supermarket already offers insurance to all of its approximately 10,000 employees, no matter how many hours they work, but the affordability clause in the Affordable Care Act is a concern, said Michael Galat, the company’s vice president of employee services.

Big Y employees check out customers Wednesday at the Northampton store. Big Y Supermarket already offers insurance to all of its approximately 10,000 employees, no matter how many hours they work, but the affordability clause in the Affordable Care Act is a concern, said Michael Galat, the company’s vice president of employee services. JERREY ROBERTS Purchase photo reprints »

Employers in this state are not new to dealing with health care reform. In 2006, those that didn’t already have it added coverage for their full-time employees when the Massachusetts Health Care Reform Law required it. But when new regulations from the federal Affordable Care Act go into effect next year, employers will face reform and regulations on an entirely different scale, one expert said.

“The U.S. Constitution and all 27 amendments were 7,818 words,” said Donald Poulin, an Easthampton resident and benefits adviser for Smith Brothers Insurance of Boston and Hartford.

“Massachusetts health care reform passed in 2006 was 40,602, but the federal health care reform called Obamacare is over 400,000 words, and that’s just the legislation,” Poulin said. “Since then, in the last three years, millions of words and pages of regulations have been released to go with it.”

Given that scale, it’s not surprising that these regulations can be confusing and daunting. These days, employers find themselves trying to weed through the jargon to determine whether the rules apply to them, what qualifies as affordable care, or even what the term ‘full-time’ actually means. And if they make a mistake, the penalties are much greater than those under Massachusetts health care reform.

“There are no easy answers and there’s a lot to keep track of,” Poulin said.

Some of the differences between Massachusetts health care reform provisions and the federal Affordable Care Act are the number of hours worked that make employees eligible for mandated coverage, the definition of so-called affordable insurance and the fines levied for violations. (See related story for details.)

Starting in 2014, employers with over 50 full-time employees or the equivalent in part-timers have to offer insurance to anyone working over 30 hours per week, or face a fine of $2,000 per employee, minus the first 30 employees. Employers could also be fined $3,000 per employee whose insurance is not considered affordable.

In other words, western Massachusetts employers and others across the state may be ahead of those in other parts of the country because they have gone through health care reform before, but the federal regulations are still a significant challenge for many.

Interviews by the Gazette with local employers, including a nonprofit, a bank and several stores, showed that employers are getting advice about compliance from insurance experts and professional associations. Many said they already offer the amount of insurance required under the Affordable Care Act and therefore do not expect to make changes. Others are still figuring out what they need to do to comply.

“A lot of decisions haven’t been made yet,” said Thomas Butler, director of compensation and benefits for Big Y Supermarkets. At this point, Butler and his colleagues do not know how much the changes will end up costing them.

Poulin said the clock is ticking and employers need to educate themselves about the changes and make sure they can either comply or afford the penalties by 2014.

“It’s put a lot on them,” he said. “They’re already struggling in the slow economy with high health care costs and this has added a serious administrative part.”

Joel Feinman, president and associate medical director for Valley Medical Group, said the company has been working for months to figure out how to deal with possible changes in coverage for employees who work variable hours. It hasn’t been easy, he said, but health care is never simple.

“The idea of insuring everyone in the country is good. This in general is the right thing to do — how it plays out is the issue,” he said. “But we’ve been through these things before. When Medicare first came out, everyone thought it would be a big revolution, and it was. It worked well.”

Watching the clock

Poulin said the Affordable Care Act will especially change things for businesses in the health care and human services industries.

Hospitals, for instance, rely on a lot of nurses who work per diem, meaning they don’t have a regular schedule and work as needed, or part-time nurses who regularly pick up extra shifts that might put them over 30 hours. “Now, they have to be offered insurance,” he said.

“The change for per-diem employees is where we will see the most effect,” said Theresa Byrd, director of human resources for Valley Medical Group. The company offers insurance to employees at 20 hours a week, she said, so the 30-hour-week mandate is not a big concern.

But 12.5 percent of the company’s approximately 400 employees, or about 50 workers, fall into the per-diem category, Feinman said. At Valley Medical Group, per-diem workers are either those who have a regular schedule but work fewer than 20 hours a week, or are what administrators call “true per-diem” workers, who fill in on an on-call basis.

In the past, Byrd said, hours were monitored to make sure they offered insurance to those people regularly working an average of more than 20 hours a week, but they did not have fines hanging over them. Now it seems more urgent to keep a watch because the stakes are so high.

“We have to make sure that we’re closely monitoring now to see when they’re eligible,” Byrd said. “That will be the biggest thing for us.”

Feinman said he does not think the changes from the Affordable Care Act will mean much added cost for Valley Medical Group, because most employees are already covered by sufficient insurance. He said he did not have an estimate of the cost.

Affordability

To be considered affordable, the health insurance offered cannot cost an employee more than 9.5 percent of his or her household income. Also, the employee cannot be required to pay for, on average, more than 40 percent of the costs of all covered benefits.

Big Y Supermarket already offers insurance to all of its approximately 10,000 employees, no matter how many hours they work, but the affordability clause is a concern, said Michael Galat, the company’s vice president of employee services. “I wouldn’t say it’s a worry, but it is something we have to be aware of,” he said.

Butler said the insurance the corporation offers is not overly expensive; the issue is the way affordability is determined under Obamacare. “For most individuals, it would be affordable,” he said. “But the challenge is, it’s based on each employee’s household income.

While the cost of an insurance plan would be under the 9.5 percent threshold for the majority of employees, it may not be for a lower-wage employee with a smaller paycheck. Butler said the company could incur a lot of expense trying to make the coverage affordable, and it still may not be able to come up with a plan that would be affordable for all employees.

“Paying the penalty on one or two individuals could be more cost-effective than changing the whole plan, which could affect thousands of employees,” he said. “It’s a balancing act between what’s affordable for most and what the penalties are.”

Poulin said he is seeing some employers doing the math to determine if it would be more economical to pay the penalties, but most are just adding a higher-deductible plan that costs less.

Some Obamacare critics have speculated that the legislation will lead to companies dropping coverage because it is cheaper to pay the penalties, but Poulin said he has not seen any employers seriously considering dropping coverage. “No one wants to be first and be at a competitive disadvantage,” he said.

Of the workers whose coverage is deemed unaffordable, those who make less than 400 percent of the federal poverty level — $45,960 for a single person or $94,200 for a family with two earners — are qualified to get a subsidy to buy their own insurance through a private exchange run by the government. “I see employers wondering if they or their employees would be better off in the exchange. If the employees can get subsidies, they might be,” Poulin said.

At the Valley Medical Group office in Greenfield, Byrd said she has attended seminars about Obamacare and the company is getting help from its insurance broker, which has a person who is specifically trained to advise on Obamacare. “We’re still in the process of figuring out the exact impact on us,” she said.

Butler said the goal of the Affordable Care Act — to get everyone insured — is a good one, but hard to manage through regulations. The effects are the thousands of words — over 400,000, as Poulin said — that create “administrative headaches” and additional costs, even for companies that already offer insurance to workers.

“We’ve offered coverage to all our employees for years, yet we may have to tweak things to comply,” Butler said. “It’s a hard goal to accomplish.”

Insurance benefits analyst Donald Poulin said what most people associate with the Affordable Care Act are the well publicized aspects such as coverage for minors until they are 26 and free birth control for women — but employers need to know a lot more about the legislation. Here’s a basic breakdown of the changes coming with the Affordable Care Act, …